3B:14-56 - Deposit in name of fiduciary; checks; when bank liable - New Jersey Statutes

3B:14-56.  Deposit in name of fiduciary;  checks;  when bank liable
    If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which the deposit is entered, without being liable to the principal, unless the bank pays the check with the actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check or with knowledge of facts that its action in paying the check amounts to bad faith.  If, however, a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal  if the fiduciary in fact commits a breach of his obligation as fiduciary in  drawing or delivering the check.

     L.1981, c. 405, s. 3B:14-56, eff. May 1, 1982.